5391.T WACC - Weighted Average Cost of Capital
The WACC of A&A Material Corp (5391.T) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.3% | 6.95% |
| Tax rate | 27.0% - 32.0% | 29.5% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.7% - 6.5% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.69 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.3% |
| Tax rate | 27.0% | 32.0% |
| Debt/Equity ratio | 0.53 | 0.53 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.7% | 6.5% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 5391.T | A&A Material Corp | 0.53 | 0.82 | 0.59 |
| 5262.T | Nippon Hume Corp | 0.02 | 0.9 | 0.88 |
| 5387.T | Chiyoda Ute Co Ltd | 0.69 | 0.76 | 0.51 |
| 5973.T | Toami Corp | 1.39 | 0.31 | 0.15 |
| 6484.T | KVK Corp | 0 | 0.21 | 0.21 |
| 7822.T | Eidai Co Ltd | 2.42 | 0.52 | 0.19 |
| 7871.T | Fukuvi Chemical Industry Co Ltd | 0.06 | 0.59 | 0.56 |
| 7896.T | Seven Industries Co Ltd | 0.81 | 0.27 | 0.17 |
| 7945.T | Comany Inc | 0.18 | 0.59 | 0.52 |
| 7949.T | Komatsu Wall Industry Co Ltd | 0 | 1.1 | 1.1 |
| Low | High | |
| Unlevered beta | 0.39 | 0.54 |
| Relevered beta | 0.54 | 0.75 |
| Adjusted relevered beta | 0.69 | 0.83 |
5391.T's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for 5391.T:
cost_of_equity (6.95%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.